Update

Reporter Nitasha Tiku covers technology, finance, green business, and social entrepreneurship for Inc. magazine and contributes to the staff?s daily links blog. Her work has appeared in New York magazine, The Villager, Chelsea Now, and on nymag.com. She lives in Brooklyn, New York.

Virtual World, Real Complaints

When Philip Rosedale appeared on the cover of Inc. in February 2007, he and his team at Linden Lab had built Second Life into a fast-growing virtual community with two million residents. Now, Second Life has some 16 million users, who spend more than $300 million a year in its in-world economy to buy virtual goods like clothing and homes. But Linden Lab is still going through some real-world growing pains. As the tech blog GigaOm reported, in October several disgruntled Second Life users immolated their avatars in front of Linden Lab's in-world offices. The cause of the avataricide was a steep price increase for virtual land, a change that drew thousands of complaints from users.

In May of last year, Rosedale stepped down as CEO to focus on the company's long-term vision. He was replaced by Mark Kingdon, a veteran of the online ad world. Kingdon says that Second Life's main revenue streams, like fees for virtual land, are doing just fine. "All technologies go through a hype and an antihype phase," says Kingdon. "Second Life is in its posthype phase. But it's still a very viable, profitable business."